INVESTOR’S GUIDE IN THE AGRICULTURAL SECTOR IN MOROCCO April 2019 AGENCY FOR AGRICULTURAL DEVELOPMENT INTRODUCTION Located on the southern shore of the Mediterranean, on • Supporting these projects with appropriate the northwestern tip of Africa and at the gates of Europe, macroeconomic policy reform : Debt reduction, on the western edge of the Arab and Muslim world and maintenance of macro equilibrium, trade the Maghreb, the Kingdom of Morocco has always been liberalization, taxation adequacy, etc. a crossroads of civilizations and today an intersection of major regional groupings. Among the main sectors of activity, agricultural and agro-industrial sector has undeniable advantages Due to its historical choice of the openness to its making Morocco one of the most attractive countries in environment and its willingness to continue to work terms of investment in the region. for a better world, Morocco has accelerated the pace of implementation of structural projects and, by drawing In this context, Morocco has made considerable on its liberal orientation, has pursued its modernization efforts to improve the investment environment in at the political, economic and social levels and thus this sector particularly in the context of the Green strengthening the stability of the country. Morocco Plan by improving the framework conditions and the modernization of institutional, legislative and Morocco has in fact undertaken a series of structural regulatory systems regulating the economic activity reforms in order to achieve strong and sustainable and strengthening the attractiveness of the Kingdom to growth. Coupled with the progressive liberalization of domestic and foreign investors. all sectors of activity, these reforms have had positive results on the national economy. Launched in 2008, the Green Morocco Plan has put the investment at the core of its equation of development • Liberalization of the financial sector and restructuring and modernization of this sector, and this through of public finances ; triggering a wave of massive investment, around new • Implementation of several sectoral development domestic and international investors operating in the strategies that set specific goals of the different sector, with investments created around private projects sectors and declined them in action plans and or win-win aggregations through specific and adapted program contracts : Tourism (VISION 2020), Morocco Offer. Commerce (RAWAJ PLAN) New Information and Communication Technologies (DIGITAL MOROCCO This investor guide in the agricultural sector highlights PLAN), Energy (NATIONAL ENERGY EFFICIENCY the advantages and potentials Morocco offers to PROGRAM), Industry (EMERGENCE PLAN 2020), investors and project owners in the agricultural, agro- Fisheries(HALIEUTIS) and Agriculture (GREEN industrial and para-agricultural fields, the different MOROCCO PLAN) ; aspects that characterize the business climate as well as • Improving the economic infrastructure : the framework conditions and the new developments Megaprojects involving highways, railways, seaports of the reforms undertaken within the framework of the and airports ; Green Morocco Plan. INVESTOR’S GUIDE IN THE AGRICULTURAL SECTOR IN MOROCCO 3 April 2019 AGENCY FOR AGRICULTURAL DEVELOPMENT CONTENTS PART 1 SOCIAL AND ECONOMIC CONTEXT 6 1.1. Macroeconomic environment 10 1.2. Green Morocco Plan : Orientation, Strategies and Associated Programs 16 1.3. Strengths and potentials of investment in the agricultural sector 28 PART 2 CHARACTERISTICS OF THE AGRICULTURAL SECTOR 30 2.1. Natural Resources 32 2.2. Agricultural Production Sectors 35 2.3. Valorisation of the agricultural production 62 PART 3 INVESTMENT ENVIRONMENT 68 3.1. Financial aid from the State 70 3.2. Insurance and financing products 73 3.3. Public-private partnership programs 90 3.4. Factors and means of agricultural production 93 PART 4 INSTITUTIONAL, NORMATIVE AND LEGAL FRAMEWORK 102 4.1. Specific legal framework for the agricultural sector 104 4.2. General normative and legal framework 119 4.3. Institutional framework 128 PART 5 MARKETING OF AGRICULTURAL INPUTS AND PRODUCTS 130 5.1. Domestic market 132 5.2. Export market 137 5.3. Import market 144 ANNEXES 146 Abbreviations and symbols 148 Useful links and websites 150 INVESTOR’S GUIDE IN THE AGRICULTURAL SECTOR IN MOROCCO 5 April 2019 April 2019 6 INVESTOR’S GUIDE IN THE AGRICULTURAL SECTOR IN MOROCCO AGENCY FOR AGRICULTURAL DEVELOPMENT SOCIAL AND ECONOMIC CONTEXT INVESTOR’S GUIDE IN THE AGRICULTURAL SECTOR IN MOROCCO 7 April 2019 MOROCCO IN BRIEF Located at the far northwest of the African continent and 14 kilometres away from Europe by the Strait of Gibraltar, the Kingdom of Morocco is a privileged crossroads between Africa, Europe and the Arab world. Covering an area of 710,850 square kilometres, Morocco opens onto both the Atlantic to the west, with 2934 km of coastline, and the Mediterranean Sea to the north with 512 km of coastline. This vast territory is bordered to the east with Algeria and to the south with Mauritania. This exceptional geographic location gives Morocco a role of a strategic platform, at both the politico-economic and cultural levels. Fact sheet on the Kingdom oF morocco OFFICIAL NAME Royaume du Maroc CAPITAL Rabat LOCATION Afrique du nord, à 14 km de l’Europe POLITICAL SYSTEM Monarchie constitutionnelle démocratique, parlementaire et sociale HEAD OF STATE Sa Majesté le Roi Mohammed VI (20ème Roi de la dynastie Alaouite) CURRENCY Le dirham marocain (MAD) AVERAGE EXCHANGE RATE IN EUR 1 = MAD 11,343 FEBRUARY 2018 USD 1 = MAD 9,193 • GDP : MAD 1,016.1 billion • Distribution of GDP by sector of activity : Primary sector : 13%, secondary sector : 30% and tertiary sector : 57% • GDP Growth : 4,4% (in 2017) MACRO-ECONOMIC DATA IN 2014 • Gross National disposable Income : MAD 1,077 billion • Inflation rate : 1,6% • Imports of goods and services : MAD 224 billion • Investment rate (GFCF(*)/GDP) : 33,1% • National Savings Rate : 28,8% • Population (2017) : 34 996 167 Inhabitants DEMOGRAPHIC DATA • Working population (2017) : 47,5% (FORECASTS) • Urban population (2017) : 61,9% • Life expectancy (2014) : 74 ans • Arabic and Amazigh, Notwithstanding this, the official and administrative Documents are drawn up in OFFICIAL LANGUAGES Arabic and French SECONDARY LANGUAGES French, Spanish and English Sunni Islam OFFICIAL RELIGION The Moroccan constitution guarantees the free exercise of other religions TIME ZONE GMT (GMT+1 : Summer time) mediterranean in the north, Atlantic in the west and the Saharan in the south, the climate differences are ex- CLIMATE CONDITIONS plained by the influence of various factors (geographical extent, sea, desert, continentality, Canary currents, watershed exposure ...) April 2019 8 INVESTOR’S GUIDE IN THE AGRICULTURAL SECTOR IN MOROCCO AGENCY FOR AGRICULTURAL DEVELOPMENT THE AGRICULTURAL SECTOR IN FIGURES Agriculture is an important pillar of development in Morocco. Its economic and social weight, its structuring association in rural areas, and the multiplicity of its functions including the economic, social, environmental and food related aspects, make it a natural development engine. The importance of the agricultural sector is evidenced by its significant contribution to the formation of the national GDP and job creation, particularly in rural areas where agriculture is the main employer and source of income for 1.5 million farmers. The food industry is one of the pillars of the economy with a production value of 110 billion dirhams. It is the first sector of the domestic industry and one of the best development assets of the country (30% of added value (5% of GDP) and 12% of permanent employment except canned fish). A significant contribution to the formation of GDP : 13 % to 20 % A major reservoir of employment : 40% of jobs and income source for 74,5% of rural population Foreign exchange earnings through exports : 1.8 billion euro representing 11% of the total value Balanced coverage of the requirements of food products : 100% for milk and meat, 100% for vegetable products, 60% for cereals, 43% for sugar… • A considerable Usable Agricultural Area : 8.7 million hectares of which 1.6 million hectares irrigated. • A major hydro-agricultural infrastructure : 139 dams allowing mobilization of 15.2 billion M3 of water of which 13.3 billion M3 for agricultural use. • A diversified agricultural production : 1 Million hectares of olive, more than 250 000 ha of vegetable crops, 125 000 ha of citrus fruits, 28 million heads of which 66% of sheep. INVESTOR’S GUIDE IN THE AGRICULTURAL SECTOR IN MOROCCO 9 April 2019 MACROECONOMIC ENVIRONMENT Working continuously on the improvement of the quality of its macroeconomic environment, Morocco has engaged for decades into a vast reform process and a dynamics of continuous improvement particularly with regard to its political, social and economic aspects. At the political level, the amendments made to the constitution confirm the conviction of the political leaders and their choice of democratizing the institutions and working on the political and social development of the country. In this regard, Morocco has experienced since independence, six constitutions promulgated respectively in 1962, 1970, 1972, 1992, 1996 and 2011. The latter is rightly considered as the means to initiate a great democratic turn. The social aspect has also experienced many changes that have been accelerated since the 2000s to improve the living conditions of the population. Thus, beyond the successive reforms of